City Finance Official Resigns Seat on a Developer’s Board, Citing Publicity

New York City’s finance commissioner resigned Sunday from the board of a national real estate company that paid her fees totaling more than $134,000 in 2006 and 2007, expressing concern that publicity over whether her role was appropriate could become a “distraction.”

The commissioner, Martha E. Stark, said she had obtained official approval to serve as a director of the Tarragon Corporation, a publicly traded company with nearly 15,000 condominiums and town houses planned or under construction around the country, although none in New York City. But Mayor Michael R. Bloomberg said he first learned of the arrangement this weekend, when it was reported by The New York Post, and questioned whether his administration was appropriately informed.

“I have not looked at all — gotten all — of the facts yet, and I will do that, and I will certainly talk to her,” Mr. Bloomberg told reporters after marching in the St. Patrick’s Day parade in Throgs Neck in the Bronx. “If she did get all the appropriate clearances, I still think the administration should have known, and I want to make sure that from now on everybody does.

“Whether or not we had all the information and whether or not it could have been handled slightly differently is one of the things I will certainly look at this week,” he added.

Shortly after Mr. Bloomberg’s comments, Ms. Stark issued a written statement announcing her resignation from the board: “Although it was cleared by the city’s Law Department and the Conflict of Interest Board prior to my agreeing to serve as a board member for Tarragon Corporation, and all income was fully and accurately reported to the appropriate oversight agencies, I do not want this issue to become a distraction from the work we do at the Department of Finance.”

Ms. Stark’s spokesman, Owen Stone, provided a copy of a letter dated April 11, 2005, from the president of the city’s Conflict of Interest Board saying that as long as her service on Tarragon’s board was not in conflict with her official duties, it would not violate the City Charter. The letter suggested that Ms. Stark had also been told by the city’s Department of Law that her board service would not violate the city’s rule barring department heads from engaging in “any other occupation, profession or employment.”

Kate O’Brien Ahlers, a spokeswoman for the Law Department, confirmed that in 2005 it had advised Ms. Stark that a board with three or four meetings a year would not be a problem.

Photo

Finance Commissioner Martha E. Stark was on the board of the Tarragon Corporation.Credit
Evan Vucci/Associated Press

But in 2007, federal filings show, the board had 16 meetings, and each member attended at least 75 percent of them. Ms. Stark also served that year on a special panel of the Tarragon board looking into the credit crisis, for which she was paid $50,000. William S. Friedman, Tarragon’s chief executive, said that the panel required significant extra work, though he said it was “never more than five hours in one week.”

Federal filings show that company directors are paid about $20,000 a year for attending occasional meetings, plus stock options and bonuses for serving on committees. In 2007, federal filings show, Ms. Stark was paid $90,316, mostly in cash. In 2006, when there were six board meetings, she received $44,126, about half in cash. The company is not yet required to file its 2008 payments.

Ms. Stark, whose city biography calls her the first African-American woman to serve as finance commissioner, first worked at the department from 1990 to 1993. She then was a White House fellow assigned to the State Department, and later served as director of policy and development in the Manhattan borough president’s office.

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Mr. Friedman said Sunday that he sought out Ms. Stark for the board for “the combination of her experience, her forcefulness and diversity.” Traditionally, he said, “we have had one person from the public sector.”

In 1989, Carl B. Weisbrod, a former executive director of the New York City Planning Commission, and Sally B. Hernandez-Pinero, a former city commissioner of financial services, were elected to the company’s board. Mr. Weisbrod, who still serves on it, did not return a call on Sunday.

Founded in 1973, Tarragon is based in Manhattan and has offices in Wallingford, Conn.; Dallas; and Florida. It is described on its Web site as “a high-density, urban homebuilder” and mixed-use developer with “a track record of navigating complex political and procedural processes to produce award-winning communities.”

Battered by the financial downturn, the company entered Chapter 11 bankruptcy proceedings on Jan. 12. (It continues to operate.)

Mr. Friedman said the company had no projects in the city “and if we ever did, Martha would be the first to recuse herself.” Speaking before she announced her resignation, he said, “It would be a loss to shareholders.”

The mayor, for his part, called Ms. Stark “somebody who probably works, if I had to guess, 40, 50 or 60 hours a week on a normal week, so it isn’t like she isn’t working very hard for the city.” Still, he drew a distinction between Ms. Stark’s service on the board of New York University, her alma mater, and on the board of a commercial corporation.

Fernanda Santos contributed reporting.

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